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LD 874

An Act To Provide Relief To Federal Or State Employees Affected By A Federal Government Or State Government Shutdown

132nd Legislature (2025-2026) Introduced by Poppy Arford and 8 co-sponsors

LD 874 creates a government shutdown loan guarantee program that backs loans to affected Maine state and federal employees, funded by a one-time $250,000 transfer.

Signed by Governor
#financialpractices #loans #shutdownloanprogram
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Bill Summary · LD 874

Summary — LD 874: “An Act To Provide Relief To Federal Or State Employees Affected By A Federal Government Or State Government Shutdown”

Status: Signed by the Governor (July 7, 2025)
Introduced: March 4, 2025
Committee: Health Coverage, Insurance and Financial Services
Subjects: Financial practices; loans; government shutdown loan program

Purpose and intent

LD 874 establishes and funds a loan guarantee mechanism to provide short‑term relief to Maine state or federal employees who are financially affected by a federal or state government shutdown. The program is intended to enable affected employees to obtain loans from participating financial institutions by having the State guarantee repayment in the event of default.

Key provisions

  • Creates (or continues) a Government Shutdown Loan Guarantee Program Fund to guarantee repayment of loans made by eligible financial institutions to employees affected by a government shutdown.
  • Provides a one‑time funding source of $250,000 (Other Special Revenue Funds) transferred from the Bureau of Financial Institutions to the Government Shutdown Loan Guarantee Program Fund in FY 2025‑26.
  • Allocates $250,000 to the Office of the Treasurer of State to permit expenditures from the Government Shutdown Loan Guarantee Program Fund.
  • Authorizes use of the fund to reimburse the Finance Authority of Maine (FAME) for administrative costs of running the loan guarantee program. Because reimbursement is permitted, FAME will not require a separate General Fund appropriation for administration.
  • If the initial $250,000 is insufficient to cover the State’s guarantee liability, additional funding would be required.

Note: The bill as enacted includes amendments (Committee Amendment H‑121 and Senate Amendment S‑465) which affected funding sources and technical details; the final engrossed version directs the one‑time transfer from the Bureau of Financial Institutions’ Other Special Revenue Funds.

Who is affected

  • Primary beneficiaries: Maine state and federal employees who suffer income interruption during a government shutdown and who need short‑term loans.
  • Participating lenders: eligible financial institutions that make loans covered by the State guarantee.
  • Administrators: Finance Authority of Maine (program administrator, reimbursable) and the Treasurer of State (custodian of the fund).
  • State finances: a one‑time $250,000 transfer into a special revenue fund; potential additional costs only if defaults exceed available guarantee funds.

Fiscal impact and implementation notes

  • FY 2025‑26: One‑time appropriation/transfer of $250,000 to the Government Shutdown Loan Guarantee Program Fund (Other Special Revenue Funds).
  • FY 2026‑27 onward: No additional direct appropriations shown in fiscal notes; ongoing liabilities depend on loans made and defaults.
  • Reimbursing FAME from the same fund reduces the pool available to cover loan guarantees, increasing the risk that additional funding would be needed if defaults are higher than anticipated.

Legislative actions — timeline highlights

  • Committee work, amendment adoption (H‑121; S‑465), and floor passage occurred May–June 2025.
  • House and Senate concurred on amendments (June 25, 2025).
  • Signed into law by the Governor on July 7, 2025.

This summary is based on the bill text and the fiscal notes as amended and approved in late June 2025. The bill establishes a guarantee structure (not direct grants); program scale and fiscal exposure will depend on how many loans are issued and default experience.

Compiled from official sources — confirm details with the bill’s official record.

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